Correlation Between Garda Diversified and Lendlease

Can any of the company-specific risk be diversified away by investing in both Garda Diversified and Lendlease at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Garda Diversified and Lendlease into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Garda Diversified Ppty and Lendlease Group, you can compare the effects of market volatilities on Garda Diversified and Lendlease and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Garda Diversified with a short position of Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garda Diversified and Lendlease.

Diversification Opportunities for Garda Diversified and Lendlease

-0.39

Correlation Coefficient

Garda Diversified  Lendlease

Very good diversification

The 3 months correlation between Garda and Lendlease is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Garda Diversified Ppty and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group and Garda Diversified is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Garda Diversified Ppty are associated (or correlated) with Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Garda Diversified i.e., Garda Diversified and Lendlease go up and down completely randomly.

Pair Corralation between Garda Diversified and Lendlease

Assuming the 90 days trading horizon Garda Diversified Ppty is expected to generate 1.08 times more return on investment than Lendlease. However, Garda Diversified is 1.08 times more volatile than Lendlease Group. It trades about 0.09 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.08 per unit of risk. If you would invest  112.00  in Garda Diversified Ppty on September 15, 2024 and sell it today you would earn a total of  10.00  from holding Garda Diversified Ppty or generate 8.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Garda Diversified Ppty  vs.  Lendlease Group

Garda Diversified Ppty

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Garda Diversified Ppty are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Garda Diversified may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lendlease Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lendlease Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Garda Diversified and Lendlease

The main advantage of trading using opposite Garda Diversified and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garda Diversified position performs unexpectedly, Lendlease can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lendlease will offset losses from the drop in Lendlease's long position.

The idea behind Garda Diversified Ppty and Lendlease Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.